FMCG manufacturers are keeping a close eye on commodity price declines and may extend some benefits.

While palm oil prices have eased and sugar prices have remained stable, FMCG firms have stated that prices for some other major items, such as wheat, remain firm and that they will wait and see before making any decisions on price reductions.

Leading FMCG companies say they are keeping a close eye on commodity prices, which have fallen in some cases, such as palm oil, but the decline has not been "secular and broad-based." While palm oil prices have eased and sugar prices have remained stable, FMCG firms have stated that prices for some other major items, such as wheat, remain firm and that they will wait and see before making any decisions on price reductions. commodity price declines will help FMCG companies improve their profit margins and give them more leeway to pass on the benefits to consumers by lowering the MRP (maximum retail price) of their products. Nestlé India Chairman and Managing Director Suresh Narayanan stated that the company is keeping a close eye on the situation. However, he believes the commodity price decline is not long-term or widespread. "We will monitor the situation and determine our next course of action." "The commodity price decline is not long-term and broad-based," Narayanan told PTI on the sidelines of an event here. When asked about new product launches this fiscal year, he said, "There will be some new initiatives." Aside from palm oil, the price of edible oil has fallen in recent months. Some FMCG manufacturers have recently reduced or increased the grammage of soaps and large packs of packaged food, extending the benefit to consumers. Last week, Varun Berry, Vice-Chairman and Managing Director of leading bakery maker Britannia Industries, stated that while commodity prices are not currently softening, he believes they will in the future. "The only commodity that is currently softening is palm oil." Wheat prices are rising. Sugar has remained stable. On balance, we are nearing flat to slight inflation. "Hopefully, as time goes on, things will settle down," he said. Berry also stated that any benefits from commodity price declines would be passed on to consumers. Abneesh Roy, Nuvama Group Executive Director, Institutional Equities, stated that the softening of commodity prices would assist traditional FMCG companies in resuming volume growth. "Promotion and grammage can increase, which will gradually drive recovery in volume growth," Roy explained. Last month, Pidilite Industries Managing Director Bharat Puri stated that while inflation remains high in comparison to the past, it has fallen to a "manageable level." Nielsen IQ's latest report on the FMCG industry stated that consumption continued to slow in the September quarter, with rural markets experiencing a greater decline in volumes than the three months that ended in June. Furthermore, despite companies raising prices in response to broader inflationary pressures, consumers continued to prefer purchasing smaller packets.